Among the business groups subject to disclosure with assets exceeding 5 trillion won (US$3.79 billion), or large corporate groups, last year, Celltrion secured the top spot for the sixth consecutive year with the highest proportion of internal transactions. The overall internal transaction ratio of domestic subsidiaries within disclosure-targeted corporate groups also increased by 0.5 percentage points compared to the previous year, reaching 12.3 percent.
On Dec. 11, the Fair Trade Commission released the “Status of Internal Transactions of Business Groups Subject to Disclosure in 2022 (Status of Transactions on Products and Services).” According to the report, the amount of internal transactions between domestic subsidiaries increased from 217.5 trillion won in 2021 to 270.8 trillion won in 2022, indicating a growth of 53.3 trillion won.
The overall internal transaction proportion for both domestic and foreign subsidiaries, analyzed for the first time this year, reached 33.4 percent. The internal transaction amount stood at 752.5 trillion won. The primary factor contributing to this figure was the substantial revenue generated by global export companies in transactions with overseas sales subsidiaries.
The conglomerate with the highest proportion of internal transactions is Celltrion, where 62.5% of the total revenue resulted from internal transactions through domestic and foreign subsidiaries. Following closely were Hankook Tire with 62.4 percent, Samsung with 58.3 percent, SK with 55.8 percent, and Hyundai Motor with 52.9 percent.
In terms of internal transaction amount, Samsung recorded the highest at 244.2 trillion won, followed by Hyundai Motor at 131.6 trillion won, SK at 125 trillion won, LG at 61.9 trillion won, and POSCO at 45.9 trillion won. For internal transactions among domestic subsidiaries, SK led with 57.7 trillion won, while among overseas subsidiaries Samsung claimed the top spot with 209.3 trillion won.
The amount of internal transactions of the top 10 conglomerates with CEOs amounted to 196.4 trillion won, constituting 71.4% of the total internal transaction amount for all conglomerates, which was 275.1 trillion won. Analysis suggests that the increase in these conglomerates’ sales performances has contributed to the simultaneous expansion of internal transactions.
Hong Hyeong-joo, head of the corporate group management division of the Fair Trade Commission, said, “It is hard to conclusively determine the potential for unfair internal transactions based solely on the mere fact that there is a high proportion and amount of internal transactions between subsidiaries. However, considering the continued positive correlation between the total ownership ratio of the CEO’s family and the proportion of internal transactions, as well as the high proportion of private contracts related to internal transactions, monitoring is necessary to assess the occurrence of unfair internal transactions.